BDS market development guide.pdf - PACA

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WITH WHOM SHOULD WE WORK?
A shift in the focus of intervention to development of BDS markets calls for a similar shift in
thinking about the partners 35 with whom we work. What has changed? Essentially thinking
about developing BDS markets has led us to recognize that:
# The spectrum is broader: we are starting to understand that the range of actual or
potential service providers is much more diverse
and different than we originally believed.
# Our intervention objectives will be different:
switching from assisting SMEs directly to ensuring
sustainable access to services, via functioning
markets, changes the nature and objectives of our
interventions and, by extension, influences partner
choice.
The combination of these two factors gives us a much
less rigid picture of who partners should be. The mesolevel
(Box 16) can no longer be thought of a distinct
institutional layer made up of organizations with
specific characteristics or structures. Overall, we are
faced with a much messier choice regarding market
development, from which the following trends are
emerging:
Box 14: Changing Views of the
Meso-level in Nepal
There is a long history of donor agency
support for BDS in Nepal. In the early-
1980s, GTZ undertook pioneering work
on training and counseling that
eventually led to the development of the
well-known CEFE model. By the 1990s,
a wide range of donors, including SDC,
were involved in supporting BDS. During
this period, there has been a discernible
evolution in how agencies perceive the
meso-level in BDS:
• 1980s-Early-1990s: government and
quasi-government organizations as
the key deliverers of services (with
donor and government subsidy for
almost everything);
• Focusing less on any single provider;
• Working with more service providers; 36
• Working with a greater diversity of service
provider types;
• Focusing more on private sector service providers;
• Increasingly specialized, differentiated, nichefocused
service providers; and
• Smaller service providers:
• Early-Late 1990s: business
membership organizations as the
main players (with significant donor
support for delivery); and
• Late-1990s-Now: private sector and
other market-oriented providers with
market development as the
overarching objective (and with
donor support more focused on
development rather than delivery).
Although perhaps less obvious in some
countries, this shift in thinking that is so
evident in Nepal is representative of a
wider trend that has major implications
for partner choice.
35 “Partners” here refers to service providers.
36 See McKenzie, J, "Creating a market in management training for Vietnam's private firms: MPDF's
experience"; Paper presented to conference on "Business services for small enterprises in Asia: developing
markets and measuring performance"; Hanoi, 3 rd -6 th April, 2000. Leila Webster reported at an April 2001
BDS workshop that the new business management training products stimulated by the project is resulting in a
new range of tailored management courses offered by a range of local providers.
Microenterprise Best Practices
Development Alternatives, Inc.